Word on the Street yesterday was China’s first-quarter growth rate was going to be hot. Scorching hot. The so-called “whisper number” was estimating GDP of 9%, well ahead of the 8.4% figure economists had been expecting.

It was such a bullish call that it helped send the Dow Jones Industrial Average up 181 points, capping the best back-to-back performance of the year.

Yeah, that rally looks a little silly right about now.

Last night, data showed China grew at an 8.1% rate in the first quarter, expanding at its slowest pace since the first quarter of 2009. This triggers all sorts of worries about China’s economic slowdown and the impact on overall global growth.

Stock futures are down, and European markets are a mess. Mid-morning in London, stocks were in the red across the continent, with some of the steepest falls in the two countries everyone’s watching: Spain and Italy. The Spanish IBEX 35 was off 2.3% and the FTSE MIB shed 1.7%. Once again, the risk pendulum has swung to “off”: The euro’s weaker, the dollar’s stronger and Spanish and Italian bond yields are both up.

Asian markets had a better day: The Hang Seng and the Nikkei both ended positive.

Back in the states, today is shaping up for another rocky session, capping a week that has witnessed three triple-digit moves for the Dow.

The swings are a mini-reminder of the sharp volatility in 2011, when markets were whipsawed every which way on European debt worries and double-dip recession fears.

The fact that the Dow surged yesterday on the flimsy China rumor was a sign that whacky, unexplainable behavior could be making a comeback.

“We’re not going to be buying quickly into a rally like this,” says Bruce McCain, chief investment strategist at Cleveland’s Key Private Bank, a subsidiary of KeyCorp. “We think there’s greater potential for downside than more gains from these levels.”

Markets are generally viewed as healthy when they grind higher on improving corporate and economic fundamentals. Big swings are interpreted with a hint of skepticism and make many investors think twice about the state of a market.

Meanwhile, the actual fundamentals that are supposed to lead the action have been lackluster. Case in point is China’s slowing growth.

Back on the domestic front, rising jobless claims combined with last week’s monthly report are making investors think twice about the labor market, and the economy.

“The payroll number on Friday suggested we’re going to have a pretty heavy seasonal distortion in much of the economic numbers over the next few months,” Mr. McCain said. “You’re going to see less economic strength than the market has priced in.”

Buckle up. China’s economy is raising flags, Europe is flaring up again and the U.S. economy may be poised for some turbulence. These volatile daily moves of late may become the new norm rather than an aberration.

Morning MarketBeat Daily Factoid: On this day in 1997, Tiger Woods — at age 21 — became the youngest person to with the Masters Tournament.

-Steven Russolillo

Stocks to Watch

Among the stocks that could see active trade in Friday’s session are J.P. Morgan, Wells Fargo and Google.

J.P. Morgan is slated to report first-quarter earnings before the opening bell. The company is expected to earn $11.6 a share on revenue of $24.4 billion, according to the average estimate of analysts polled by FactSet Research.

Wells Fargo will post a profit of 73 cents a share on revenue of $20.4 billion if Wall Street’s best estimates are on the mark.

Late Thursday, shares of Google gained in after-hours following the company’s report of hefty profit and revenue increases that handily surpassed Wall Street’s expectations for the first quarter.

Comments (1 of 1)

Ah yes, the Wall Street Bear is back in action. Wow the S&P futures are down 0.5%. Oh yes buckle up boys, its going to be a bumpy day. Whatever. I doubt China was the only factor fueling the rally yesterday and missing by 0.3% is not that bad for their miss. Jeesh.

Thanks for reading MarketBeat. We would like to direct you to MoneyBeat, the Wall Street Journal’s brand new global blog. MoneyBeat unites MarketBeat, The Source, Overheard and all the Deal Journal blogs, bringing together all the market, M&A, IPO and hedge-fund news from those blogs into a 24-hour hub for finance news. Check it out and let us know what you think at moneyblog@wsj.com.

About MarketBeat

MarketBeat looks under the hood of Wall Street each day, finding market-moving news, analyzing trends and highlighting noteworthy commentary from the best blogs and research. MarketBeat is updated frequently throughout the day, helping investors stay on top of what’s happening in the markets. Lead writers Paul Vigna and Steven Russolillo spearhead the MarketBeat team, with contributions from other Journal reporters and editors. Have a comment? Write to paul.vigna@wsj.com or steven.russolillo@wsj.com.